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Collecting

2. What is numismatics?

A simple definition of numismatics is the collection and study of coins, paper money, tokens and medals, and indeed these are the most widely collected and studied numismatic materials. Other items representing current or past financial assets or liabilities are also included under the numismatic umbrella. These include other objects used as money, as well as stock certificates, checks and notes of financial obligations.

Numismatic items are collected and studied for many reasons, including their historical significance and artistic merits, as well as their role in commerce. When significant demand exists, they may obtain numismatic value beyond their current monetary value (if any).

Coin collecting is perhaps the most popular part of the hobby and is sometimes used to refer to the entire numismatic spectrum. There are a number of specializations in coins and other branches of numismatics. With such breadth of material, numismatics offers virtually inexhaustible opportunities for exploration, learning and enjoyment.

3. What coins do people collect?

What to collect is entirely up to the collector. It will normally be a specialization that holds some interest for the collector and is within his or her budget.

Among the most popular types of collections are world coins (coins from several countries), ancient coins, and coins of a particular country. Some specialization within these categories is ordinarily helpful. If collecting from a particular country, you can work on one or more series, a type set, commemoratives, errors, die varieties, paper money, etc. You may also want to set bounds on the grades of coins you collect, e.g. all G-VG, VF or better, or Uncirculated.

Series

The goal of collecting a series is to acquire one of each date and mintmark issued for a particular coin design, usually including any major design differences. For example, the U.S. Standing Liberty quarter was produced from 1916 to 1930 at the Philadelphia, Denver and San Francisco mints (coins were not made at all three mints every year, and none were produced at any mint in 1922); a major change to the obverse was made in 1917, and the full set is generally considered to include both designs for that year from each mint.

Type

A collector building a type set seeks to have one example of each series and major design variation within each series. Examples might include 20th century Canadian coinage or U.S. gold coins.

Ancients

Contributed by Mike Marotta

From the invention of coinage in Ionia about 650 BC to the last Roman emperor of 450 AD, the gold, silver and bronze of ancient world are surprisingly available. A common silver drachma issued by Alexander the Great might cost about $60. A common silver denarius from one of the early Roman emperors might cost $30. Gold costs more. Bronze -- being more common -- costs less. For $10 or $20, you can own a bronze coin that circulated during the time of Archimedes or St. Paul. Most collectors of ancients work on themes: the Twelve Caesars, the town of Carthage, the goddess Diana, etc.

Errors and Varieties

Some enjoy collecting coins that are different because of a variation or a mistake in the minting process. Die varieties include coins with doubled letters or features, overdates, repunched mintmarks, and other variations traceable to differences in dies used to strike coins. A striking error occurs when something goes wrong in the coining press, producing an unusual coin.

Tokens, Tickets, Tallies and Checks

Contributed by Andrew D N Andison

When the government ignored the needs of the people and refused to issue sufficient low value coins the traders took matters into their own hands and issued tokens. In Great Britain this took place in the mid 1600's, the 1790's and the 1810's. These formed a local currency and it took several acts of Parliament to ban them. The bans were never completely successful and 'advertising tickets' continued to be issued through the mid 1800's. These were conveniently the same size as farthings, the coin still in very short supply, and undoubtedly circulated as such. By the end of Queen Victoria's reign the need for tokens had gone but there were all sorts of other similar pieces being used. Pubs issued checks but because they were such an everyday occurrence nobody thought the record how they were used! The co-operative societies used checks to record the value of purchases made so that the correct amount of divident could be paid. Fruit pickers received tallies to depending on the quantity of fruit picked. The most recent use of tokens is probably the ones used in gaming and vending machines, as well as the one used by the many transport undertakings.

4. What's the best way to get started?

Buy the book before you buy the coin is frequently offered and sage advice.

Coins can be rewarding for the collector who makes the effort to study the hobby and the market. Someone who does not make that effort is more likely to waste money on overgraded, problem or counterfeit coins. Before spending a lot of money on coins, invest in your knowledge of the hobby. This FAQ is a start, but for your own protection you should have at least one reference book covering your area(s) of interest. Reading a few issues of periodicals is another good idea.

Collecting coins from circulation is a great place to start. The risk is negligible (you can always spend the coins), and you can learn a lot examining your coins carefully and seeing what your reference book says about them.

Join a club! Local coin clubs are usually great for learning more about the hobby, getting material for your collection, and you just might make some good friends, too.

5. Where to find collectable coins?

When the coins you're interested in collecting are not available in circulation, it's time to look for other sources. That almost always means purchasing coins. Among places to buy coins are

Coin shops

Dealers with their own stores can be good resources for information as well as coins.

Coin shows

Here you can shop from several dealers at once. The selection will obviously be better than at most shops, and you may be able to get better prices due to the presence of competition.

Mail Order and Internet

Coins can be purchased from many dealers through the mail and on the internet. Check any of the periodicals listed below for advertisements. Unfortunately, it is all too common to receive overgraded and/or problem coins from some mail order sources. Make sure the source has a reasonable return policy before ordering, examine the coins carefully on receipt to ensure they're satisfactory (get an opinion from a more experienced collector/dealer if you're unsure), and return them if they're not.

Auctions

The rarest and most expensive coins are often available only at auctions promoted by major specialty auction firms, such as Stack's, Heritage and Bowers & Merena.

Numerous auctions are conducted online at eBay and other sites. Before bidding, carefully check feedback on the seller. Focus on his/her feedback earned as a seller. Feedback earned as a buyer or seller can be quickly inflated by numerous small purchases or sales. Make sure the seller has a reasonable return policy. Lookup the actual sales prices of similar items and comparison shop other sources before bidding. Examine coins carefully on receipt to ensure they're satisfactory (get an opinion from a more experienced collector/dealer if you're unsure), and return them if they're not.

Relatively common collector coins are sometimes included in auctions of antiques, other collectibles, etc. The collector is forewarned that material in these auctions is more likely than usual to be overgraded, have problems not mentioned (if even known) by the auctioneer, and/or to garner inflated prices. Better material at lower prices can often be readily obtained from other sources.

Other collectors

It's not often easy to locate another collector selling what you want, but when it happens, you may get a better price. Post what you're looking for in rec.collecting.coins or attend some local coin club meetings.

Flea markets, bazaars, etc.

Coins are sometimes available at flea markets, antique shows, craft fairs and other events where they are not the primary focal point. Because there is little if any competition for the seller and many potential buyers are not well informed about the hobby, these venues can be used to move problem coins and prices may be inflated. While the collector always needs to be able to evaluate the quality of potential purchases and fairness of their prices, extra caution is warranted in these situations.

6. How to handle coins

In general, collectable coins should be handled carefully to avoid the possibility of causing wear or introducing substances that may lead to spots or color changes. Many holders will provide adequate protection for ordinary handling. Before removing a coin from its holder, consider whether it's really necessary.

Never touch an uncirculated or Proof coin anywhere but the edge. Fingerprints alone may reduce the coin's grade and consequently its value. Handling on the edge only is mandatory when examining another person's coins, regardless of grade. Get in the habit of picking up collector coins by their edges, and it will soon become routine.

Avoid holding numismatic items in front of your mouth. Small particles of moisture may eventually cause spots.

When setting a coin down outside of a holder is necessary, place it on a clean, soft surface. A velvet pad is an ideal surface and essential for regular handling of valuable material. A clean soft cloth or clean piece of blank paper may be sufficient for less valuable items. Do not drag coins across any surfaces.

If you will be handling very valuable coins or lots of uncirculated and/or higher grade circulated coins, wearing clean white cloth or surgical gloves and a mask may be advisable.

7. Grading

The condition of a coin is commonly summarized by a grade. Because the value of collector coins often varies dramatically with grade and overly generous grading is not uncommon, reasonable grading proficiency is an important skill for collectors. The material presented here is intended only as an introduction to the subject. Grading is a skill that can only be developed over time through referrals to grading guides, consultation with experienced collectors and dealers, and lots of practice.

Published standards set objective criteria for grading, yet some amount of subjectivity is inevitable -- even expert graders will often assign slightly different grades to the same coin. While you can often ask an experienced grader for an opinion, being able to make your own reasonable assessment of grade is your best protection.

An overview of American Numismatic Association standards follows. ANA standards are widely used in the U.S. but are not the only system used. Much of the rest of the world uses the grades Fair, Fine, Very Fine, Extremely Fine, Uncirculated and Fleur-de-coin.

Numerals used in coin grades have been taken from the Sheldon scale (see Glossary).

Uncirculated Coins

Coins with no wear at all are referred to as uncirculated or in mint state (MS). Grades from MS-60 to MS-70 in one point increments are used for mint state coins. Criteria include luster; the number, size and location of contact marks; the number, size and location of any hairlines; the completeness of the strike; and the overall eye appeal.

An MS-60 coin may have dull luster and numerous contact marks in prime focal areas, as long as there is no wear. To merit MS-65, a coin should have brilliant cartwheel luster (attractive toning is permissible), at most a few inconspicuous contact marks, no hairlines, and nearly complete striking details. Grades from MS-61 to MS-64 cover intermediate parts of this range. Truly exceptional coins may be graded MS-66, MS-67 or, if absolutely flawless, as high as the theoretical maximum of MS-70. Some numismatists consider MS-70 to be an unobtainable ideal.

Terms such as brilliant uncirculated (BU), choice BU, gem BU, select BU and premium BU are still used in lieu of numerical grades by some dealers, auctioneers and others. Correlations between these terms and the numeric MS grades are difficult at best, because of inconsistent usage and in some cases overgrading.

Market values for many uncirculated coins vary dramatically from one grade to the next. Remember that whether a coin is described with a numerical or an adjectival grade, it's only someone's opinion. Until you are comfortable with your ability to grade uncirculated coins, take advantage of other opinions, such as those available with slabbed coins or from experienced collectors and dealers you trust, or concentrate on circulated coins.

Circulated Coins

For circulated coins the grade is primarily an indication of how much wear has occurred and generally does not take into account the presence or absence of dings, scratches, toning, dirt and other foreign substances (though such information may also be noted).

AU-58, very choice about uncirculated: just traces of wear on a coin with nearly full luster and no major detracting contact marks

AU-55, choice about uncirculated: small traces of wear visible on the highest points

AU-50, about uncirculated: very light wear on the highest points; still has at least half of the original mint luster

EF-45 or XF-45, choice extremely fine: all design details are sharp; some mint luster remains, though perhaps only in "protected areas"

EF-40 or XF-40, extremely fine: slightly more wear than a "45"; traces of mint luster may show

VF-30, choice very fine: light even wear on high points, all lettering and design details are sharp

VF-20, very fine: most details are still well defined; high points are smooth

F-12, fine: major elements are still clear but details are worn away

VG-8, very good: major design elements, letters and numerals are worn but clear

G-4, good: major design elements are outlined but details are gone; for some series the date may not be sharp and the rim may not be complete.

AG-3, about good: heavily worn; date may be barely discernable

While coins more worn than AG are rarely collected, two additional grades are nevertheless used to characterize them:

F-2, fair -- very heavily worn; major portions may be completely smooth

P-1, poor, filler or cull -- barely recognizable

While not included in the ANA standards, intermediate grades like AU-53, VF-35, F-15 and G-6 are used by some dealers and grading services. When a grader believes a coin is better than the minimum requirements but not nice enough for the next higher grade "+" or "PQ" (premium quality) may be included. For example, a coin could be described as VG+ or MS64PQ. It's also not uncommon for a range to be stated, e.g. F-VF for a coin that's considered better than the minimum requirements for F but not quite a VF.

Split Grades

When there are significant differences between the obverse and reverse sides, a split grade may be assigned. Split grades are denoted with a "/". For example, "F/VF" means that the obverse is F and the reverse is VF.

The overall grade is often determined by the obverse. An intermediate value may be appropriate when the difference is significant, especially if the reverse is lower. A coin graded MS-60/61 would be considered to have an overall grade of MS-60, and another at MS-65/63 could be considered to have an overall grade of MS-64.

8. Pricing

Coin prices are a function of supply and demand. Market prices decline when inventories cannot be moved at current levels and eventually rise when insufficient quantities are available to meet current demand. Of course, if the buyer or seller is unaware of current trends, a transaction may occur outside the normal range of prices.

Demand is ultimately established by collectors and investors but often more directly by dealers, who must sell coins for more than they pay for them to cover expenses and make a profit. Consequently, there are multiple tiers of prices for any particular collector coin. Retail refers to prices dealers charge most collectors and investors, while wholesale means prices they charge each other. Collectors and investors with a substantial market presence (spending considerable amounts, especially on a regular basis with the same dealer) may be able to buy at or near wholesale levels. Published price guides list typical prices for retail and wholesale transactions -- actual prices may be somewhat higher or lower.

Dealers will usually pay less than wholesale when buying coins from the public. Therefore, collectors and investors should be aware that it is difficult to "get their money back," should the need arise to sell their holdings. Of course, they may do better by bypassing a dealer altogether, but it may not be easy to find another collector or investor looking for the specific coins one wants to sell, and even then the potential buyer may consider it an opportunity to acquire the coins at a discount. In addition, there are some advantages to purchasing coins from a dealer. A reputable dealer will guarantee the authenticity of the merchandise. He or she will be knowledgable enough to form reasonable opinions on grades, to detect problems that may be missed by less experienced persons and will usually be willing to share knowledge with the public, especially customers.

9. What's the best way to clean my coins?

In most cases, the best answer is DO NOT CLEAN COINS. While you might think they'll look nicer if shiny, collectors prefer coins with an original appearance. Cleaning a coin may reduce its collector value by half or more.

Cleaning coins is similar to restoring works of art - they're both jobs best left to professionals who have the knowledge and experience to know when it's advisable, what techniques will work best and how to use them properly.

Never abrasively clean coins. Even wiping with a soft cloth will cause small but undesirable scratches, which will reduce the coin's value.

If the surface of a coin appears to be tarnished, it is best left alone. The color change is the result of a natural process, which collectors call toning. Atoms on the surface of the coin have reacted chemically, often with sulfur compounds. The reaction cannot be reversed. "Dips" which strip molecules from the surface are available. Dipping is the quintessential example of a technique that should be used only by professionals, if at all. Additionally, natural toning sometimes increases the value of a coin (i.e. when it's considered attractive).

Dirt and other foreign substances adhering to a coin can sometimes be safely removed. Try soaking the coin for a few days either in olive oil or soapy water, followed by a thorough rinse with tap water. Dry the coin with compressed air or allow it to air dry. Do not rub the coin. Commercial coin cleaners may also be carefully used to more quickly loosen foreign substances.

10. How can one tell when a coin has been cleaned, especially if it was cleaned long ago?

Contributed by Mike Locke

If the coin has been cleaned with an abrasive, the coin will have hairlines. Have a look at the coins in Overton's half dollar book; a large proportion (maybe 20%) of them appear to have been harshly cleaned with an abrasive. Also, abrasive cleaning often leaves some crud in the recesses of the coin (untouched dirt or left over abrasive).

If the coin has been dipped, it may or may not be detectable. A bright white 1801 half dollar is immediately suspect. Although it is possible for such an original coin to exist, it is unlikely. Also dipping can strip the lustre off of the coin, with the end result that there is no lustre where you would expect it to be for a coin in said condition (XF and better coins).

A natural coin has a particular appearance which reflects the history of its storage. Haphazardly stored coins tend to have a "dirty" appearance to the toning. Coins that have lived for a long time in a coin cabinet tend to have spectacular colored toning. Coins stored in a clean metal vault (such as an old style "piggy" bank) may stay white (or red) for a long time. Coins stored in albums develop either the familiar "ring toning" (slide type albums) or the much less desireable "one sided toning" (all cardboard albums). Coins stored in mint bags often show spectacular rainbow toning, similar to that seen on coins stored in coin cabinets.

Copper/bronze/brass coins that have been cleaned have an unnatural color, often looking like a toned gold coin. Even after they retone, they tend to have an uneven and slightly odd color (watch out for dark areas). See that red in the recesses of that VF copper coin? Not a good sign! Naturally toned, *circulated* copper tends to be very uniform in color, although they might be dark and dirty around the lettering and similar protected areas. Uncirculated copper may tone very unevenly (especially proofs), so do not automatically count this against such a coin.

Exactly the other way around, silver coins that have been cleaned tend to be extremely uniform in color after they retone, including the tops of the letters and protected areas. Silver coins with natural toning will usually show some variation in the color at these places. Be aware that a uniform slate gray color can be produced on silver very easily with a number of chemicals. Finally, a heavily toned and subsequently dipped silver coin will tend to have a gray appearance caused by surface roughness rather than tarnish. This can be detected by careful examination with a strong magnifier.

The ANA advises that sudden "hard line" changes in color do not occur on naturally toned coins. Naturally toned coins exhibit a gradual change in color or darkness. In any event, its mostly a matter of looking at a lot of coins and forming your own opinions. Assuming that you are buying coins for your personal collection, in the final say, it is *your opinion* that really matters.

11. How should I store my coins?

Environment

A relatively constant, moderate temperature and low humidity are preferable for long term storage of numismatic collectibles. Placing packets of silica gel in coin storage areas helps control atmospheric moisture.

Holders

Several types of "containers" for coins are available. Most anything will do for coins with little numismatic value, while nearly airtight holders made of inert materials are a good idea for valuable coins.

Bags, jars and boxes are adequate for pocket change and circulated bullion coins.

Paper envelopes of various sizes are sometimes used for one or more coins. Be sure to use envelopes made explicitly for holding coins, or your coins may change color (tone) over time due to reaction with sulfur or other chemicals present in the paper.

Plastic flips are available in various materials. "Soft" flips are made from polyvinyl chloride (PVC) and contain a plasticizer that decomposes over time with disastrous results for coins. They are therefore not suitable for long term storage. Mylar and acetate flips do not contain the plasticizer that makes PVC flips soft. However, they can be brittle and may scratch coins that are not inserted and removed carefully. While not airtight, they are reasonable choices for moderate value coins that will be "left alone" for multiple years but less so for coins to be shipped or that will be removed and reinserted.

Mylar-lined cardboard, often called "2x2s" but also available in other sizes, are similar to plastic flips. A coin is placed between the two halves, which are then stapled together (some brands contain an adhesive).

Hard plastic holders are preferable for more valuable coins. They are not known to contain any materials that harm coins and offer good protection against scratches and other physical damage. They are available for individual and small sets of coins.

Slabs are sonically sealed hard plastic holders for individual coins. They offer good (though still not perfect) protection. Because of the expense of having a coin slabbed, they are generally suitable only for more valuable coins.

Tubes are plastic containers designed to hold a number of the same size coins. They are fine for bulk storage of circulated coins and can be used for higher grade coins, provided the coins do not move. A disadvantage is that the coins cannot be viewed without being removed from the tube.

Coin folders and maps are cardboard or paper products with holes (often but not always labeled) into which coins are pushed. Only one side of the coin can then be viewed. Over several years coins may tone due to reaction with sulfur or other chemicals present, and they are therefore not a good choice for long term storage of higher grade coins.

Coin albums are book-like products that allow both sides of each coin to be easily viewed with the use of plastic covers that can be slid out for coin insertion and removal. When properly used, albums offer protection from wear and handling.

12. Tools of the trade

What tools and other resources does a numismatist need? The answer depends on the material being collected and its value. At a minimum, collectors should have a magnifier and an applicable reference book, though someone collecting only coins from circulation may be able to get by without them. A comfortable location with a suitable light source for examining coins is also advisable.

All sorts of magnifiers are available. For grading, 4-10 times magnification is sufficient, with 7x magnification considered by many to be ideal. Collectors of die varieties need 10x magnification or more.

Anyone purchasing coins should own at least one general reference book with information on dates and mintmarks, major varieties, grading guidelines and prices. Additional references examining topics in more detail (e.g. grading, counterfeit detection or die varieties) are often useful. Periodicals will have more recent pricing information and news. Good reference works can pay for themselves several times over by helping you avoid bad decisions.

Find a comfortable well lit location in your home where you won't be distracted. A large clean desktop or work bench is best. Avoid food, beverages and other contaminants when handling valuable material. Task lighting should be located within 0.5 meter (20 inches) above the work surface. An LED lamp is the best lighting option for output intensity, color consistency, energy efficiency, service life, cost of operation and maintenance. You may find that multiple lamps improve your viewing experience.

A number of precautions can be taken to minimize the possibility of loss by fire or theft. Which ones make sense depend on the value of the collection, relative risks and access requirements. Note that most homeowner insurance policies specifically exclude coins and other numismatic items from coverage. A rider can be obtained for an additional premium, or a separate policy can be obtained. ANA offers optional insurance for collections to its members. Maintain records about your collection and store a copy separately from the coins.

Locked fireproof storage is an effective countermeasure against fire and theft risks. Home safe boxes are available in a wide range of capabilities and costs. Remote storage in a bank safe deposit box is another option. Weigh the pros and cons of access convenience and upfront vs recurring costs to pick a solution.

Well designed lighting, entry locks and dogs are proven deterrents against home breaking and entering. More extensive tips are available from law enforcement agencies.

Be discrete about being a coin collector. Avoid telling anyone you don't know well and trust, and when the subject does come up, be sure to mention that you keep the coins in a safe deposit box or the collection isn't worth much (even if not strictly true). The more people you tell about your collection, the more likely that information will eventually reach the wrong person. If you regularly receive coins and/or promotional materials in the mail, consider getting a post office box and having all numismatically related mail sent there.